5 Strategies for Managing Your Parent’s Finances

By Rick Cohen, 3:45 pm on June 20, 2013

As our parent(s) get older, it is natural for us to become concerned about their growing health concerns and ability to fully manage their daily activities and responsibilities on their own. When a parent become diagnosed with an illness or has declining mental awareness, it can be difficult for them to manage paying their bills on time and their money appropriately. We at Home Care Assistance understand it can be difficult to see your parent(s) health and mental awareness decline and understand you may worry about how to best help your Mom or Dad continue to be successful in managing finances.

Although your parent(s) may have a hard time relinquishing control of their money, it may be a good idea to begin taking some control of your parent’s finances and seeking out the appropriate resources. We at Home Care Assistance understand you want the best care possible for your loved one and can often become overwhelmed and not know where to begin to seek out the proper help and assistance. Here are some suggestions to get you started on how and what to manage when your Mom or Dad needs assistance in managing his/her finances.

Have an open conversation with your parent(s). You need to become informed about your loved one’s current financial situation and how their finances are set up and being managed. It may be difficult for your parent(s) to open up about their private information, so it is important to be sensitive and understanding during the conversation. It may be a good idea to find out who is currently involved in their financial “world.” Perhaps they have previously contacted legal advisers or potential Powers of Attorney. Where are their important documents and paperwork kept? Do you need a key to a safe? Have they made investments or have stocks and bonds? Many seniors do not want to share this private information so it is important to discuss the sensitive topic with care and remind them that you only want to help. Your Mom or Dad may not be ready for you to completely “take over” their finances; remain respectful while also trying to allow them to keep as much independence in their financial choices as possible.

Become your parent’s financial manager. By becoming your parent’s financial manager, you can help protect them from elder abuse such as fraud or identity theft. Help them get copies of their credit score and monitor their spending and credit card statements to help ensure they aren’t being victimized. You may also wish to start writing their checks out for bills each month if you feel it is in their best interests. Perhaps you can also gain access to their online accounts to see current balances and check tax returns, etc. If your parent has spending issues, you may also need to step in and set limits on credit card spending and weekly/monthly cash allowances. This would allow them to choose how to spend some of their money helping them keep some of their independence all while still following a strict budget. Remind them you are looking out for their best interests and only want what is best for them. Try to keep them involved in their finances as much and as long as possible, and wait to take over completely until you absolutely have to.

Ensure they have safe investments. Persons in their 70s, 80s and beyond can’t afford putting their life savings into risky investments as they won’t have time to “bounce back” from the losses. Make sure their financial portfolio is comprised mainly of safe investments like bonds, CDs and mutual funds.

Have a will, living will and healthcare proxy in place. Ensuring that your parent has these three legal documents can avoid hassles in the future. A will identifies who should inherit his or her property. A living will reveals the senior’s healthcare wishes in the event they become incapacitated. A healthcare proxy appoints an individual to make healthcare decisions that are not detailed in a living will, in the event that your Mom or Dad is incapable of doing so.

Seek power of attorney. Power of attorney allows you to make financial decisions on your parent’s behalf if they are mentally unstable or their health inhibits them from making rational decisions. If you feel it would be in your parent’s best interests, you can try and seek power of attorney to fully manage their finances. When talking to your parent about this topic, you may also wish to discuss long-term care options. Understand it can be very difficult for your parent to relinquish much of their independence in their lifestyle choices and financial decisions. Remain respectful of their wishes while keeping their best interests in mind. While it is difficult to discuss, planning helps ensure your parent’s happiness and safety as they age. Click here to see if home care is right for your aging parent or loved one.

Seeing your Mom or Dad’s health decline as they age is certainly not an easy thing to deal with. We understand helping with a parent’s finances and providing care often comes with resistance, and it may not be easy to help your parent understand your need for involvement. If your parent refuses help, read the following article on understanding the emotional needs of elders. By understanding how they are feeling, you will be able to effectively communicate with them on even the most sensitive topics while showing them you care.

Home Care Assistance is a trusted provider of home care in Milwaukee, helping to enhance the lives of seniors with premier care services, compassionate and highly trained caregivers and a devoted Care Management team. We are available twenty four hours a day, seven days a week, so please don’t hesitate to contact us with any home care questions.